Global tech giants liable for anti-competitive in SA media landscape

South Africa's Competition Commission has released its provisional findings from a probe into market activities, revealing that tech giants, including Google, are liable for anti-competitive behavior that has negatively impacted the local media landscape. The watchdog is set to publish a final report later this year, with all concerned parties given until April 7 to submit evidence to support their case. Phathutshedzo Manenzhe, Senior Analyst at the Competition Commission South Africa, joined CNBC Africa to discuss the key factors that led to these conclusions. Amid the rise in internet access, there has been a shift towards online news consumption, posing challenges for news media businesses in offsetting losses from traditional advertising by transitioning to digital advertising. However, tech firms like social media and search platforms are competing for digital advertising revenue, exacerbating the struggles for news media businesses. The use of AI summaries on search engines further reduces traffic to news websites, depriving media businesses of the opportunity to monetize their content adequately. The Commission found that social media platforms promote sensational content and misinformation, diverting users from credible news sources. To address these issues, the proposed remedies aim to revive the South African media industry by restoring referral traffic to peak levels and providing better monetization options for news media businesses. These actions are designed to offset the losses incurred due to the misconduct of the tech platforms. In the event of non-compliance, the Competition Act empowers the Commission to enforce binding remedial actions, with potential penalties for infringing parties. While governmental intervention through regulatory changes or subsidies could further support media sustainability, the focus remains on compelling tech giants to compensate local media for financial losses. The Commission's report recommends that Google compensate the South African media industry an annual sum of 300 to 500 million rand, based on the value exchange between news media and search engines. The distribution of these funds will prioritize media outlets serving the local market, taking into account regulatory oversight and the need for media diversity. Furthermore, the report suggests amending the Electronic Communications and Transaction Act to introduce platform liability for misinformation, aiming to address the deliberate spread of fake news while safeguarding free speech rights. The implementation of this liability framework and its retroactive application to past offenses are subjects of ongoing deliberation and stakeholder feedback. All concerned parties have until April 7 to submit evidence and comments, with the final report expected within four to five months following this consultation period.